UNDP Slams Washington Consensus; Lists 54 countries losing ground

50 Years listserv
Jul 8, 2003
by AP; The Guardian

The United Nations Development Programme (UNDP) issued its 2003
Human Development Report on Tuesday. Reports on it from AP and the
Guardian (UK) follow.

While the HDR has always had a solid reputation for comparative analyses,
this year’s report and the attendant publicity go a little further. They say that
the development model that the IMF and WB continue to follow, even after
20+ years, has failed and that governments need to look beyond austerity and
market fundamentalism. It highlights the economic slippage over the 1990s by
54 countries. The blunt language attributed to UNDP head Mark Malloch
Brown (former head of External Relations at the Bank) -- recommending a
“guerilla assault on the Washington Consensus” -- marks a break between
the two institutions which could prove to be very useful.

The UNDP does not have the level of funding or influence that the WB and the
IMF do. But it is not a minor player either. The annual HDR is its most
influential document, featuring the Human Development Index, rating all the
countries of the world for standards of living (the highest being Sweden this
year and the lowest Sierra Leone).

Although it’s significantly better than the WB and IMF, the UNDP remains part
of the problem; it still believes in neo-liberalism, though this report suggests a
major softening (and features an essay by Joseph Stiglitz, former WB Chief
Economist and leader of the interventionist neo-liberal approach). It will be
impossible for the WB, IMF, and wealthy governments to ignore the HDR.
And since it shines a light on fundamental economic assumptions, such as
the now-orthodox belief that growth is the key ingredient in overall economic
improvement, this year’s HDR could end up provoking the useful debates that
need to happen in wider and wider circles if we are going to break the IMF/
WB stranglehold on global economic “conventional wisom.”

Soren Ambrose - 50 Years Is Enough Network - Washington, DC USA

Published on Tuesday, July 8, 2003 by the Associated Press
Programs to Help Poor Nations Criticized
by Naomi Koppel

GENEVA -- International programs to help poor nations develop and
industrialize are failing in many countries and need radical changes if the
world is to meet its targets for reducing poverty, a major United Nations report
said Tuesday. Instead of forcing developing countries to cut back on public
spending, the International Monetary Fund and World Bank should be
pressing rich countries to provide more help, the 367-page Human
Development Report 2003 said.

Despite a widespread assumption that all countries are slowly getting richer,
the report says that 54 are poorer now than they were in 1990, while life
expectancy fell in 34 countries -- primarily because of the HIV/AIDS epidemic
-- and 21 countries are hungrier than they were in 1990.

"For many countries, the 1990s were a decade of despair," said the report,
produced by the U.N. Development Program.

It said at the current rate the world will fail to meet most of the "Millennium
Development Goals" agreed upon by the countries of the world in 2000. They
call for poverty to be reduced by half by 2015 and for big steps forward in
education, sanitation and health.

UNDP Administrator Mark Malloch-Brown said a "guerrilla assault" is needed
on the so-called "Washington Consensus" that sets out the general policies
used by the IMF and the World Bank -- including an emphasis on careful
control of public spending, tax reform, trade liberalization and privatization.

"The IMF and the World Bank should no longer set these kinds of ceilings" on
spending, he said.

"These measures were introduced at a time when finances were leaking red
ink all over the place and there was an urgent need to stabilize. The strategy
had its time and place. The Washington Consensus did some good things,
but people stuck with it too long -- and it wasn't enough."

The report cited the case of Malawi, which has produced a strategy for
reducing poverty based on IMF and World Bank guidelines. But the plan
would not achieve the Millennium Development Goals.

"Malawi requires far more donor assistance -- as do many other countries in
similar circumstances," the report said.

"Rather than being told to lower their sights, they should be aided in
achieving the goals, with the IMF and World Bank helping to mobilize the
needed additional assistance."

The study says a total reliance on market forces and increased trade to
achieve development will not succeed.

"Public interventions are necessary to set the preconditions for market-led
economic growth," said Sakiko Fukuda-Parr, chief author of the report.

The IMF had no immediate comment on the U.N. report.

The study also includes UNDP's annual Human Development Index, which
ranks 175 countries based on income per person, life expectancy, literacy
and school enrollment.
For the third year in a row, Norway topped the list, which is based on 2001
data. Two other Scandinavian countries -- Iceland and Sweden -- followed.
The United States dropped one place to seventh but for the first time overtook
Canada -- which was top of the list in 2000.

The bottom 25 places on the list were all held by countries in sub-Saharan
Africa, with Sierra Leone in last position.

Copyright 2003 The Associated Press

The lost decade

They were promised a brighter future, but in the 1990s the world's poor fell
further behind

Larry Elliott, economics editor
Wednesday July 9, 2003
The Guardian (UK) www.guardian.co.uk

The widening gulf between the global haves and have-nots was starkly
revealed last night when the United Nations announced that while the United
States was booming in the 1990s more than 50 countries suffered falling
living standards. The UN's annual human development report charted
increasing poverty for more than a quarter of the world's countries, where a
lethal combination of famine, HIV/Aids, conflict and failed economic policies
have turned the clock back.

Highlighting the setbacks endured by sub-Saharan Africa and the nations that
emerged from the break-up of the Soviet Union at the end of the cold war, the
UN called for urgent action to meet its millennium development goals for
2015. These include a halving of the number of people living on less than a
dollar a day, a two-thirds drop in mortality for the under fives, universal
primary education and a halving of those without access to safe drinking
water and improved sanitation.

The report said the 1990s had seen a drop from 30% to 23% in the number of
people globally living on less than a dollar a day, but the improvement had
largely been the result of the progress in China and India, the world's two
most populous countries.

Despite some sporadic successes such as Ghana and Senegal, there was
little hope of Africa meeting the UN's 2015 development goals; on current
trends it would be 2147 before the poorest countries in the poorest continent
halved poverty and 2165 before child mortality was cut by two thirds. Thirty of
the 34 countries classified by the UN as "low human development" are in sub-
Saharan Africa.

Taking issue with those who have argued that the "tough love" policies of the
past two decades have spawned the growth of a new global middle class, the
report says the world became ever more divided between the super-rich and
the desperately poor.

The richest 1% of the world's population (around 60 million) now receive as
much income as the poorest 57%, while the income of the richest 25 million
Americans is the equivalent of that of almost 2 billion of the world's poorest
people. In 1820, western Europe's per capita income was three times that of
Africa's; by the 1990s it was more than 13 times as high.

In Norway, top of the UN's league table for human development, life
expectancy at birth is 78.7 years, there is 100% literacy and annual income is
just under $30,000 (about £18,200). At the other end of the scale, a newborn
child in Sierra Leone will be lucky to reach its 35th birthday, has a two in three
chance of growing up illiterate and would have an income of $470 a year.

Overall human development, measured by the UN as an amalgam of income,
life expectancy and literacy, fell in 21 countries during the 1990s. By contrast,
only four countries suffered falling human development in the 1980s.

"Though average incomes have risen and fallen over time, human
development has historically shown sustained improvement, especially when
measured by the human development index. But the 1990s saw
unprecedented stagnation, with the HDI falling in 21 countries.

"Much of the decline in the 1990s can be traced to the spread of HIV/AIDS,
which lowered life expectancies, and to a collapse in incomes, particularly in
the commonwealth of independent states."

The UN said the events of September 11 had created a "genuine consensus"
that poverty was the world's problem, but urged the west to abandon the one-
size-fits-all liberalisation agenda foisted on poor nations.

Mark Malloch-Brown, administrator of the UN development programme, said
many countries in Africa and Latin America held up as examples of how to
kick-start development were among the stragglers in the global economy.

"The poster children of the 1990s are among those who didn't do terribly well.
There are structural restraints on development. Market reforms are not
enough. You can't just liberalise; you need an interventionist strategy."

The report added that: "Over the past 20 years too much development
thinking and practice have confused market-based economic growth with
laissez faire."

The west needed to tear down trade barriers, dismantle its lavish subsidy
regimes, provide deeper debt relief and double aid from $50bn to $100bn a
year. This would provide the resources for investment in the building blocks of
development - health, education, clean water and rural roads.

"Poor countries cannot afford to wait until they are wealthy before they invest
in their people", said Jeffrey Sachs, special adviser to Kofi Annan on the UN
millennium development goals.

Economic growth alone would not rescue the world from poverty, the report
said. "Without addressing issues like malnutrition and illiteracy that are both
causes and symptoms of poverty, the goals will not be met. The statistics
today are shaming: more than 13 million children have died through
diarrhoeal disease in the past decade. Each year, over half a million women,
one for every minute of the day, die in pregnancy and childbirth. More than
800 million suffer from malnutrition."

It added: "For many countries the 1990s were a decade of despair. Some 54
countries are poorer now than in 1990. In 21, a larger proportion is going
hungry. In 14, more children are dying before age five. In 12, primary school
enrolments are shrinking. In 34, life expectancy has fallen. Such reversals in
survival were previously rare."

Matthew Lockwood, head of UK Advocacy Team, ActionAid, said: "The
shocking truth is that the poor are getting poorer.

"Leaders, in rich and poor countries alike, are not taking poverty seriously
enough. You don't solve this problem by making the leaders of poor countries
accountable to their rich-country counterparts. They need to be accountable
to their own citizens. Poor people must have a voice."

Where living standards fell between 1990 and 2001

Angola
Armenia
Azerbaijan
Belarus
Brunei Darussalam
Bulgaria
Burundi
Cameroon
Central African Republic
Chad
Comoros
Congo
Congo, Dem. Rep. of the
Djibouti
Ecuador
Gabon
Georgia
Guinea-Bissau
Haiti
Jamaica
Kazakhstan
Kenya
Kuwait
Kyrgyzstan
Latvia
Lithuania
Macedonia, TFYR
Madagascar
Marshall Islands
Micronesia, Fed. Sts.
Moldova, Rep. of
Mongolia
Nicaragua
Niger
Nigeria
Occupied Palestinian Territory
Paraguay
Romania
Russian Federation
Rwanda
Sao Tome and Principe
Saudi Arabia
Sierra Leone
Solomon Islands
Tajikistan
Togo
Turkmenistan
Ukraine

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